Bulls are taking a breather on Monday after strong gains in past two weeks, as volumes thinned due to US holiday and traders awaiting early Tuesday’s RBA policy meeting for more information about tapering decision. The action is supported by multiple bull-crosses of daily MA’s and steep ascend of 14-d momentum but overbought stochastic is about to reverse and RSI is turning down, warning about correction.
Monday’s action is holding within a tight range and still far from pivotal supports at 0.7405/02 (broken Fibo 38.2% of 0.7890/0.7106 bear-leg/daily cloud base) violation of which would signal deeper pullback and risk dip towards 0.7335/00 zone.
Conversely, consolidation above daily cloud base would keep bulls intact for fresh advance towards the target at 0.7542 (daily cloud top/100DMA).
However, the outcome the central bank’s meeting is likely going to be the pair’s key driver.
Res: 0.7478; 0.7498; 0.7542; 0.7591.
Sup: 0.7426; 0.7402; 0.7335; 0.7300.
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